As April approaches, you’ll want to make sure you’re saving as much money as you can and taking advantage of all that is available to you - as doing so could save you thousands!
Savings: ISA
An Individual Savings Account (ISA) has an investment limit of £20,000 per tax year in your name, which you can pay into any time throughout the year, without paying tax on interest, capital gains, or dividends. You can split your money between a cash ISA, a stocks and shares ISA, an innovative finance ISA and a Lifetime ISA (LISA). If you can, top up your ISA(s) to meet the £20,000 limit before March 31st, to take full advantage of the tax-free savings. The limit resets at the end of the tax year, 5th April. You can pay into more than one ISA each financial year, but the tax-free total for all of them combined will be £20,000 per tax year.
Savings: Lifetime ISA (LISA)
LIfetime ISAs have a limit of £4,000, which goes towards the limit of any other ISAs you have. You must be a UK citizen and between the ages of 18-39 to open a LISA. You must keep the money in the LISA for at least 12 months to avoid a withdrawal penalty, and the money must either be used to buy a house or stay in the account until you turn 60 to avoid withdrawal fees.
Savings: Junior ISA
Junior ISAs are savings accounts for children, which allow you to contribute £9,000 each financial year. The child can then access their money when they turn 18, without having to pay tax on their withdrawals. If you are paying into multiple children’s accounts, you can transfer up to £9,000 into each child's ISA.
Pension plan
The government offers tax relief at your highest rate of tax. For taxpayers paying 20%, your annual pension allowance for 2024/25 is £60,000 or 100% of your earnings, depending on which is lower. If you earn over £260,000, the allowance will reduce by £1 for every £2 earned above the limit. If possible, make sure you’ve contributed as close to £60,000 or 100% of your earnings to make the most of your pension plan this financial year.
Capital Gains Tax allowance
This allowance lets you make a tax-free profit when selling certain investments or assets. For this financial year, the Capital Gains Tax (CGT) allowance is £3,000. The end of the financial year is a great time to go through your portfolio and see if there’s any room to sell and make a last-minute profit.
As we gear up to the end of the financial year, make sure you have reviewed your portfolio, contributed to your pension plan, and invested in or opened an ISA so you can make the most of your savings.
Want specialist advice on how to save extra money? Give us a call on 0345 450 4660.
